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General restrictions on Nidhi Company in Tamilnadu

(a) carry on the business of
chit fund, hire
purchase finance, leasing finance, insurance or acquisition
of securities
issued by any body corporate;

(b) issue preference shares,
debentures or any
other debt instrument by any name or in any form
whatsoever;

(c) open any current account
with its members;

(d) acquire another company by
purchase of
securities or control the composition of the Board of
Directors of any other
company in any manner whatsoever or enter into any
arrangement for the change
of its management, unless it has passed a special resolution
in its general
meeting and also obtained the previous approval of the
Regional Director having
jurisdiction over such Nidhi;

Explanation - For the purposes of this
sub-rule, “control” shall
have the same meaning assigned to it in clause (27) of
section 2 of the Act;

(e) carry on any business other
than the business
of borrowing or lending in its own name:

Provided that Nidhis which have
adhered to all the
provisions of these rules may provide locker facilities on
rent to its members
subject to the rental income from such facilities not
exceeding twenty per
cent. of the gross income of the Nidhi at any point of time
during a financial
year.

(f) accept deposits from or
lend to any person,
other than its members;

(g) pledge any of the assets
lodged by its members
as security;

(h) take deposits from or lend
money to any body
corporate;

(i) enter into any partnership
arrangement in its
borrowing or lending activities;

(j) issue or cause to be issued
any advertisement
in any form for soliciting deposit:

Provided that private
circulation of the details of
fixed deposit schemes among the members of the Nidhi carrying
the words “for
private circulation to members only” shall not be considered
to be an
advertisement for soliciting deposits.

(k) pay any brokerage or
incentive for mobilising
deposits from members or for deployment of funds or for
granting loans.